U.S. MARKET AVERAGES

U.S. stock futures traded well above the flat line, pointing to a strong opening Thursday on better-than-expected quarterly results from drug maker Eli Lilly and heavy equipment maker Caterpillar Inc, as well as positive results from microchip companies, following the disappointing results from Intel Corp. last week. Specialty chipmaker LSI Logic Corp. and Altera Corp. posted a higher-than-expected quarterly profit late on Wednesday, while others, including communications chip supplier Conexant Systems Inc. posted upbeat guidance.

On Wednesday stocks opened higher, but then lost direction and finished modestly down on signs of slackening corporate profit growth and a slowdown in existing home sales.

The quarterly earnings season will have one of its busiest days today. Dow components AT&T, GM, Honeywell and Verizon are due to report their results before the opening bell. Outside the Dow, Cardinal Health, Dow Jones, UPS and Amgen are among the major firms scheduled to announce their earnings.

General Motors Corp (GM: chart) shares rose 1.1% after a regulatory filing showed billionaire investor Kirk Kerkorian lifted his stake in the auto maker to 9.9% from 7.8%.

In economic news, the Commerce Dept. said that orders for durable goods rose 1.3% in December following an upwardly revised increase of 5.4% in November, below economists’ expectations of an increase by 1.5%.

A separate report from the Labor Dept. showed that initial jobless claims in the week ended January 21 rose to 283,000 from the previous week's revised figure of 272,000. Economists had expected a more significant increase to about 305,000.

Standard & Poor''s 500 index futures were up 7 points, well above fair value. Nasdaq 100 index futures were up 14 points, and Dow Jones industrial average futures were up 66 points.

INTERNATIONAL MARKETS NEWS

Asian-Pacific benchmarks advanced Thursday, lifted by strengthening U.S. dollar and continuously falling crude oil prices. The Nikkei climbed 1.2% to 15,835.98, Taiwan’s Weighted index surged 1.24%, while South Korea’s Kospi rebounded from early losses to finish up 0.24%. Shanghai stock markets were closed for the Chinese Lunar New Year holiday and will reopen on February 6.

European stocks traded higher at mid-day, despite a weaker close of U.S. markets overnight. European averages were boosted by gains at the industrial conglomerate Siemens AG and telecom giant Deutsche Telecom. The German DAX 30 rose 0.9%, the French CAC 40 climbed 0.7%, and London’s FTSE 100 advanced 0.4%.

OIL, METALS, CURRENCIES

Crude oil prices advanced, following a three-day sell-off, as continuous worries about international supplies counteracted the fuel inventories increase. Light sweet crude for March delivery gained 21 cents to $66.06 a barrel. London Brent rose 37 cents to $64.61.

European gold prices climbed. In London gold traded at the fixed price of $562.25, up from $562. In Zurich the precious metal traded at $560.90, up from $560.70. In Hong Kong gold surged $10.90 to close at $562.10. Silver opened at $9.46, up from $9.41.

The U.S. dollar was strong against most other major currencies. The euro was quoted at $1.2241, down from $1.2248. The dollar bought 115.88 yen, up from 115.64. The British pound stood at $1.7851, up from $1.7838.

EARNINGS NEWS

Caterpillar Inc., (CAT: chart), machinery maker, reported Q4 net income of $1.20 a share, compared with 77 cents a share in the year-ago period, beating analyst estimate of $1.10 a share. Sales at the company in Q4 advanced by more than 12% to $9.66 billion from $8.58 billion.

Lockheed Martin, (LMT: chart), defense contractor, reported Q4 earnings of $1.29 per share, up from 83 cents per share last year beating analyst estimate for earnings of $1.15 per share. Net sales for the period came in at $10.22 billion, up from last year's sales of nearly $9.97 billion.

Honeywell International, (HON: chart), industrial company, reported Q4 earnings of 62 cents a share, up from 30 cents a share a year-ago, matching analyst estimate. On a continuing operations basis, the company posted earnings of 61 cents a share in Q4. Sales advanced in Q4 to $7.28 billion from $6.64 billion in the same period a year ago.

AT&T Inc., (T: chart), communication company, reported that Q4 profit reached 46 cents a share, from up more than double from 21 cents in the year-ago period, with revenue up 26%. Adjusting for merger-related, severance, and Cingular hurricane costs, and a gain from tax settlements, the company would have earned 48 cents a share, beating analysts’ forecasts of earnings of 45 cents.